Getting a license without documented work hours

[Ingenieur]

It is not a crime. It is only a civil violation. Maybe a distinction without a difference.

In many cases, it is possible to structure things like this so it would not be a labor law violation, but if the only difference between regular employees and this guy was that he was paid on a 1099, it is almost certainly one or more labor law violations of some sort.

The irs can and has criminally prosecuted for 1099's used to defraud
My wife is a cpa who specializes in taxes/audits

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.

 

[hbiss]

I understand that in the last few years the IRS has been cracking down hard on employers who give their "employees" 1099's. The reason is to avoid workman's comp, paying SSI and withholding. Most often the employee has no idea he's been paid illegally.

-Hal

 

[Ingenieur]

I understand that in the last few years the IRS has been cracking down hard on employers who give their "employees" 1099's. The reason is to avoid workman's comp, paying SSI and withholding. Most often the employee has no idea he's been paid illegally.

-Hal

they only push it criminally under certain circumstances
repeat offenders
people who won't enter into a payment agreement
combined with evasion/under reporting
In conjunction with other criminal activity like fraud

I have a side consulting business
my wife has to send the firms I work for a form every year showing my business info and my ein fed tax id
one test is hours
if I bill a firm for 100 hrs/year no issue
if I bill them for 2000 I'm guessing it may be flagged

 

[growler]

You may call it a scam, but the guy accepting the work that was paid on a 1099 was in on it and every bit as complicit.

I understand that in the last few years the IRS has been cracking down hard on employers who give their "employees" 1099's. The reason is to avoid workman's comp, paying SSI and withholding. Most often the employee has no idea he's been paid illegally.

-Hal

If you understand the tax laws then you can't have a 1099 employee. You must furnish an employee with a form W2.

Sub contractors and vendors of services get 1099 forms showing amounts paid to them. They furnish the company with a form W-9 with the name of their business and tax ID.

I agree with hbiss and think that many times the employee has no idea that he/she is being paid illegally. They would assume that if they pay their taxes that everything is OK. I think that it's up to the employeer to know if he/she is hiring sub contractors or employees. The IRS provides guide lines for this sort of thing and all you have to do is look them up or consult with a lawyer.

In this state it would be pretty darned easy to know if a person is a contractor, they would be required to have a business license that states that their business is contracting ( electrical or other).

 

[Fulthrotl]

In this state it would be pretty darned easy to know if a person is a contractor, they would be required to have a business license that states that their business is contracting ( electrical or other).

it's pretty easy to get the entire deal here.....

if i enter my license number here:

https://www2.cslb.ca.gov/onlineservices/CheckLicenseII/checklicense.aspx

i get the entire abstract of my license... history, workers comp with policy number,
principals, owners, everything.

i use it when doing lighting certifications. no valid license, and/or doesn't match
with the person, no certificate.

 

[kwired]

You may call it a scam, but the guy accepting the work that was paid on a 1099 was in on it and every bit as complicit.

I understand that in the last few years the IRS has been cracking down hard on employers who give their "employees" 1099's. The reason is to avoid workman's comp, paying SSI and withholding. Most often the employee has no idea he's been paid illegally.

-Hal

Someone finally said it. Years ago one could get away with more, the employee liked it - until he found out he had to pay self-employment taxes, which is the social security taxes that should have been withheld plus the share the employer would have been paying.
There was also potential problems when injured on the job on who is to cover the expenses.

 

[Sierrasparky]

I am amazed as to how many people think that as long as they send out a 1099 that it makes it legit.
I guarantee that every state has guide lines mirroring the IRS for who can be an independent contractor.
The IRS gives this example:
Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.
I seriously doubt a apprentice is given such control.



This is fraud at both ends.

 

[growler]

I am amazed as to how many people think that as long as they send out a 1099 that it makes it legit.
I guarantee that every state has guide lines mirroring the IRS for who can be an independent contractor.
The IRS gives this example:
Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.
I seriously doubt a apprentice is given such control.



This is fraud at both ends.

They said the apprentice had been doing work for 8 years and that means he started around 2008 and in some parts of the country things were already starting to get pretty slow.

Did the apprentice have a real choice about how he was getting paid ? It's easy to say he could have refused the job but if a person is needing work (money) it can be hard to turn down any offer.

I would think that just as an apprentice is given little control over the work, he is also given little choice as to how he is paid, if he wants the job.

If he is able to prove that he was an apprentice and an employee then the boss was the only one breaking the law.

There are employeers all over the country that try this BS and that's why it upsets me. Half the people that show up looking for work probably walked away but all the employeer has to do is wait for the person that's desperate enough ( or dumb enough ).

 

[kwired]

I am amazed as to how many people think that as long as they send out a 1099 that it makes it legit.
I guarantee that every state has guide lines mirroring the IRS for who can be an independent contractor.
The IRS gives this example:
Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.
I seriously doubt a apprentice is given such control.



This is fraud at both ends.

That might be one test of whether or not you are an employee or contractor.

I have regular or recurring clients that are sort of like employers based on that particular test, but I am still a contractor, I carry my own insurance, pay my own employment taxes, at times even supplied my own additional workers besides myself and do similar contracting for other clients as well. I may or may not have access to certain resources of the client. Like certain tools, or supplies, and may need to attend their safety meetings and follow their safety procedures when working at their location.

 

[mlnk]

I think the apprentice worker should file an appeal. The worker should get credit for hours worked. He has a strong case A worker is an innocent party and not expected to know labor laws. Incidentally, if a company pays with a 1099, they still must pay workers comp based on the amount paid. Call a workers comp carrier if you do not believe me. Also SS taxes were not avoided, the worker would have paid the full amount , about 13 to 15 % when he filed his income tax. I am not saying the employer is in the clear...just that these two criticisms may be invalid. .....In California, CSLB will occasionally have "amnesty" and allow this type of work and even unlicensed contracting work to qualify for a license. Their goal is to look to the future and protect consumers.

 

[iwire]

I think the apprentice worker should file an appeal. The worker should get credit for hours worked. He has a strong case

The worker did go to the board, it was turned down.

A worker is an innocent party and not expected to know labor laws.

No, this person is an adult and as such needs to step up and check the rules before wasting years of their life.

I feel bad for them, but they are almost at fault as much as their employer is. It would be like paying for years of college without checking of it was an accredited school.

 

[ptonsparky]

The worker did go to the board, it was turned down.



No, this person is an adult and as such needs to step up and check the rules before wasting years of their life.

I feel bad for them, but they are almost at fault as much as their employer is. It would be like paying for years of college without checking of it was an accredited school.

My college student grandson found out at tax time what a 1099 meant when he had to come up with the taxes and SS. He is going back again this summer to work for the same guy. I felt he was taken advantage of last year, this year not so. He is an adult and he now knows the consequences of that work arrangement.

Eight years was more than enough warning.

 

[growler]

Here is a lot of info about licensing and testing in MA

http://www.mass.gov/ocabr/docs/dpl/boards/el/el-cib.pdf

On page 20 is the work experience form they are looking for.

No, this person is an adult and as such needs to step up and check the rules before wasting years of their life.

I have looked over the link provided by Iwire on licensing and testing in MA.

I don't see any mention of how an employee must be paid. For work experience it states that an apprentice must work under the direct supervision of a journeyman or master. We don't know if he did that or not. In filling out form 272 I don't see where it would have been necessary to mention that an employee was paid cash and then given a 1099.

It states that the license holder is responsible to document the hours of expereince for the apprentice.

Either this person was an apprentice and was paid illegally or the license holder was subbing work to an unlicensed contractor. In this state they can pull your license for aiding an unlicensed person to do electrical contracting and I assume things are similar in MA.

I think the employer should be made to choose if he is to be hanged for a sheep or a lamb.

 

[growler]

My college student grandson found out at tax time what a 1099 meant when he had to come up with the taxes and SS. He is going back again this summer to work for the same guy. I felt he was taken advantage of last year, this year not so. He is an adult and he now knows the consequences of that work arrangement.

If he learned that he must file taxes quarterly so they won't eat him alive on penalties for being late then he may come out OK as self employed. Depends on expenses as deductions.

You have to admit that you are forced to learn a lot more about business working for yourself than working for a company as an employee.

 

[Fulthrotl]

You have to admit that you are forced to learn a lot more about business working for yourself than working for a company as an employee.

you don't have to admit anything.

you have the right to remain silent.
if you give up the right to remain silent,
anything you say, or don't say, will me misrepresented,
and used against you.

:blink:

 

[Fulthrotl]

Incidentally, if a company pays with a 1099, they still must pay workers comp based on the amount paid.

.....In California, CSLB will occasionally have "amnesty" and allow this type of work and even unlicensed contracting work to qualify for a license. Their goal is to look to the future and protect consumers.

if i hire a contractor in calif. and pay them, for contracted work,
and it's a legitimate 1099 situation, i am NOT required to pay
THEIR workers comp, on their employees. that is the contractors
responsibility that i issue the 1099 to.

i'm a one man band, and i work for, at this point, NOTHING but
other contractors, both B-1 and C-10. i have no employees, so
my C-10 abstract does not require me to provide workers comp.
for myself.

i can assure you, none of the people paying me pay workers comp
based on the money they pay me.

as this thread originally started with a person getting a license,
here is what the CSLB has to say about experience......

http://www.cslb.ca.gov/Contractors/Journeymen/Journeymen_FAQS.aspx

 

[kolyan2k]

So after whole 6 years since buddy completed his 2 year required education, board of electricians finally allowed him to take the exam (from the 1st try this time, previously it took 1 year back and forth mailing until they rejected the very same application). Any pointers on how to pass the exam, books, maybe paid prep course ? I mean its probably going to be next to impossible to pass after that many years since school without some pretty damn good preparation and studying.

 

[kolyan2k]

PS. and the "funny" part is that you pay a nice chunk of money and spend so much time for education, exams etc., and we got foreign licensed electricians here that never had to work 4 years and never had to study for 2 years, well they cover up with there licenses for many un-licensed Latin Americans for as little as $500 bucks.

 

[tom baker]

PS. and the "funny" part is that you pay a nice chunk of money and spend so much time for education, exams etc., and we got foreign licensed electricians here that never had to work 4 years and never had to study for 2 years, well they cover up with there licenses for many un-licensed Latin Americans for as little as $500 bucks.

Not in Washington.